Upsides of China's Slowdown

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... the ... Chinese ladies none the Sapien shade you call me stalling but ... now I visits ... Wi Fi now on Asia's today mine GE and joined by reports and Alex Frangos ... I think joining to talk to the status numbers you just have this morning Daddy came in seven point five percent growth ... for the second quarter ended the year before that the slowdown from the first quarter ... aam did come that people's expectations but it's also ... you know it ... before coming to realization that China ... is he knows what is slowing down it's really not can it be that kind of ... powerhouse double digit growth in a place that it's been for the much Alaska get ... sick people will realize if you buy the whole woes for Chris and limits on Chinese health bosses I ... took this very day war the impact of China's slowing economy means for Asia and the rest the Weld well with China has become such a big part of a global climate and a thirteen percent all activity this year five years ago when we were Doherty talk about how big an amazing chandeliers is only six percent to get the sense of ... how important isn't ... it ... the slowdown has trickled very quickly especially commodity exporters like Australia ... Chile Brazil work supplying the Chinese growth engine of new ... building and infrastructure in things like that ... some commodities are weighed and that's hurting those economies ... of a whirl so seeing is ... companies that are selling into China especially if consumers ... are faring ok because consumer spending is doing a lot ok was a okay it was faster ... than the second quarter that was the first quarter ... aam certainly not as fast as it was couple years ago but holding up pretty well ... ALM so creaking of Korean car companies Japanese car companies ... you know saying or doing okay so ... that they lose the fat to say don't illustrating the big one he spied the steering rack ... it feels like many other places the mini stores to bow to some getting hit by news that China cited an Annie Annie went to get well there's winners and losers in this winners who is even within a place like Australia so when we talk to a guy who builds in a mining camps for miners anal even when they're out in and out back and I think ... they're not doing well in the year-ago twins CNET TV couldn't do they couldn't keep their ... in their rooms were your fall that I mean now you know that twenty percent in twenty ... oh that and ... because of the slowdown the Australian dollar has declined in the swing it may be more attractive for tourists come to Australia so we talked the guy ... who see the hotel is brimming with French tourists of all places because they have more buying power there ... is very very complicate the very next paycheck what we know thou subduing force from here as well more than made Islam the sentiment should we be getting ... for it to finance about seven percent stake in great numbers charted at a recent story about will I think the preponderance rate now as everyone is worried on the downside you in a less ... optimistic on the upside to it you really don't know the one thing is clear is that the that that the new government in in Beijing seems to want color explore growth to the lake he can ... maintain their you know very important social stability that there are enough jobs at maybe seven percent growth that was hinted at last week by the finance minister ... so of the world is gonna get used is China being you're not quite as robust as it use to be ... but not one albeit bad thing is ... that he knew the ship of varied to find the ones who read and stick on meaning to keep that in use ... for the future with any of the fastest and that will absolutely leaving everyone knew most everyone agrees that we're where China wants to get away from investment more towards can you consumption consumer spending ... for that to happen the economy needs to slow down the question is ... to slow down gently you know from eight percent to seven a half to seven in everyone's fine can live with it where's there's some sort of you know something you know as things slow down there's something unexpected happens and we ... do get a real unit downshifted acid people are really worried about is that this process plays out ... you know I think you so much for joining us Frangos ... reports ahead of the Wall Street John all ... that's it Asia's day find JTB but for more on that story and many more please get to dovish to go ... this out from Time Ash as the economy continued to cool down in the second quarter ... how is this slowdown impacting the apparel industry ... this is Asia's today I'm unique in ... joining me today to discuss this is Stanley CTO chairman and CEO of lever Style's ... Stanley thank so much for joining us today ... first let's talk about how the slowdown is impacting your business specifically ... along the demand side others to flee the slowdown in the growth of the the the the that consumption in China ... and so instead of providing to the campuses growth in the past two years ... this year we've seen just flattish demand ... so this is a domestic consumption you're tucking into it ... ok ... and your clients include companies like Ralph Lauren J Crew ... into manufacturing because costs are rising ... are you looking at potentially moving and manufacturing facilities elsewhere it was for it be moving our production to also countries we started two years ago in Vietnam ... and you know this is public and a couple of weeks of ... of of production ... and were starting in India as we speak in July ... ok and took us a little bit more about some of the strategies that year and going to deal with the slowdown in China ... well ... on the demand side which is trying to find a ... low growth a coming of the Church's traditional market so ... after the financial crisis in China Mexico you know what though is that the U S ... demand slowed down ... China fulfilled and you know was a lot of ... strong consumption growth in China ... we took advantage of ... that actually right now we're seeing more growth from the American customers ... I met them from ... the tiny said Michelin to estimates by an off silly as seventy five percent of your revenue comes from ... exports ... and the refs from China Syria not so dependent on the trees might be sickly and weak but we intend to keep it for it diversified ... customer base so that whenever one market is not doing well with not so ... severely impacted ... write a lot a lot of Chinese companies are now looking at breezy wheat is ... um are you also evaluating Funds Henry's pollute wages are going up to be known as the year by double digits ... and that we have to keep pace of the ones you so we got it with all of ... a low cost of compensation needs to remain competitive ... to retain and attract ... staff and ... that that's deftly having a huge impact on all call structure ... and that's quite a lot of love with a new production outside of China ... high and topped with a little bit about orders coming in from clients like Ralph Lauren and Chico are things going down a bit for you guys ... she knows to the US is actually the strongest performer for us this year ... Europe is really in trouble for them and you know we've seen orders declined ... but the American markets actually showing some ... signs of growth ... and maybe perhaps we'll look it's been working with some stronger brands and retailers such as ... J crew Nordstrom ... draw for and in these these guys and it captured market share ... of that we're seeing quite ... a quite a sizeable group of U S market this year ... what about each and specifically is on a Japan is also of note ... seeing a little bit of optimism after the panel makes it all the things ... that ... I and and of the U S Japan and China on to the markets and in in in Asia ... and China stuff we bought ... a history right ... a little bit about your earnings growth he mentioned things are slowing down a little bit ... on what is your outlook for earnings for the service here is the lead difficult for manufacturers like ourselves ... up we were ... comfy so would not disclose so earnings but to ... use it there's a lot of margin compression ... and you know if liability of manufacturing in China and specifically sell in China of using ill but labor intensive ... industries such as ours ... is being healed ... and what about the challenges going forward you've been in this industry for many years what are some of the challenges that you see in your business going court follow-up ... offshoring to low-cost producing country so that's how ... we can call you do that basically ... do what China's eager to put in a low-cost environment ... and you ... have the capability to that quickly ... to ... maintain Alcoa's competitiveness skimpy politics challenge ... and there been a lot of accidents in places like Ken Doherty and then attached the factories ... of you operate in Southeast Asia so ... topped a syllable that about your concerns with the euro operations have been impacted by a single sex in some more ... specific ... so for example Bangladesh there is a real ... problem there because if the government and loose the relaxed that supplements that ... inspections and so forth so ... I infrastructure was theirs to flee from him to ... a nearly vertical ... leap for safety and so forth ... of but to mollify other Southeast Asian countries like Vietnam will help you out we don't see that as a lot ... so last couple ... cake thanks Fran much to me ... today ... for monastery to go to WSJ dot com I'm unique in for the last two channel digital network thanks for watching